European Union regulators accused Apple on Friday of violating the bloc's antitrust laws, alleging the iPhone maker distorts competition for music streaming by imposing unfair rules for rival services in its App Store.
The EU's executive Commission said it objected to Apple's rules for music streaming services that compete with its Apple Music service, saying they end up costing consumers more and limiting their choices.
The charges underscore the pressure Apple faces from EU regulators in Brussels, who have opened multiple investigations into the company. It also highlights the long-running feud between Apple and popular music streaming service Spotify over payments and app distribution.
One of the main concerns outlined by the EU centers on Apple's practice of forcing app developers selling digital content to use its in-house payment system, which charges a 30% commission on all subscriptions.
The EU's investigation, which was sparked by a complaint from Spotify, found that fees end up being passed on to consumers.
A second EU concern is that Apple prevents developers from telling users about cheaper ways to pay for subscriptions that don’t involve going through an app.
Apple rejected the charges, saying it was proud of its role in helping Spotify grow into a music streaming giant. The company also noted that Spotify doesn't pay Apple a commission for 99% of its paid subscribers.
“Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that,” Apple said in a statement. "The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”
The EU’s competition commissioner, Margrethe Vestager, said while Spotify had grown despite Apple's rules, they appeared to hurt smaller music streaming players like Deezer and Soundcloud.
“Our concern is that Apple distorts competition in the music streaming market to the benefit of its own music streaming service, Apple Music," she told reporters in Brussels.
Vestager noted that Apple Music isn't subject to the same rules, which hurts rivals by raising their costs, reducing their profit margins and making them less attractive on the App Store. She said the problem is not the fee itself, but that Apple only charges it on payments for digital content and not other services such as transport or food deliveries. The EU's investigation found it typically pushed up the price of a monthly subscription to 12.99 euros ($15.70) from 9.99 euros, she said.
Apple's ban on communicating with customers means app makers can't get the same insights into their users that Apple does, such as the reason for canceling a subscription, Vestager said.
“Not only are they not allowed to mention their websites or any link to them in their own apps,” Vestager said. “They are also not allowed to send emails to users that created an account in the app in order to inform them about cheaper alternatives."
Apple has 12 weeks to respond to the EU's objections. Under EU competition law, companies could offer a remedy — Vestager indicated she thought “Apple should end the infringement" and not do anything that would have the same effect. Or else, companies could be fined up 10% of their annual revenue for breaches. For Apple, which reported $274.5 billion in revenue in its latest financial year, that could mean a fine of up to $27.4 billion.
Spotify welcomed the EU's move. It's "a critical step toward holding Apple accountable for its anticompetitive behavior, ensuring meaningful choice for all consumers and a level playing field for app developers,” the company's chief legal officer, Horatio Gutierrez, said in a statement.
Updated on April 30, 2021, at 11:12 a.m. ET with the latest details.
Business communication platform Slack, recently released its fifth wave of results from its global workplace survey from its Future Forum consortium, showing that the workforce has already moved to a split between working from home and going to the office. “We are now officially in the hybrid era of work,” Slack Future Forum VP Sheela Subramanian said when discussing the findings. "Hybrid is a work model where people can come into the office as well as work remotely, and what we're seeing is that the majority of knowledge workers are now in this arrangement — and that number is set to grow."
Legal cannabis businesses are having a hard time surviving in California with the high cost of doing business and a still-thriving illicit market. In response, nonprofit Supernova Women, founded by women of color, is advocating on behalf of Black and brown shareholders in the cannabis industry. Amber Senter, co-founder, executive director, and chairman of the organization, spoke with Cheddar News about calling for changes in the Golden State's taxation system for legal marijuana. "We're really leaning on the legislators now to support the industry and make sure that this industry, in particular craft cannabis, can survive," said Senter.
After being among the hardest-hit industries by the pandemic, restaurants are still having a hard time staying afloat, with owners claiming that business is worse now due to closures from staff shortages and customer decline than it was three months ago. Mike Whatley, vice president of state affairs and grassroots advocacy for the National Restaurant Association, spoke to Cheddar News about how the sector is reaching out to lawmakers for help. "Working with Senators Wicker, Sinema, and a whole host of bipartisan leaders, we're trying to get the Restaurant Revitalization Fund replenished," Whatley said.
Alex Soojung-Kim Pang, founder of Strategy + Rest,
joins Cheddar News to discuss UK's pilot four-day workweek and its impact on workers' mental health.
Ed Gaussen, co-founder and CEO of Mantra Health, and Matt Kennedy, co-founder and COO of Mantra Health, joined Cheddar News to discuss the digital mental health startup's latest funding round and plans for the future.
Actor and singer Chrissy Metz, who stars as Kate Pearson in "This Is Us," is partnering with Capital One Auto Navigator to share her story of purchasing her first car to help make car buying easier for others. "For me, I know a car was so important because of course it took me to the auditions to get me to the place I have today," she said. "But it also means empowerment and freedom and accessibility, and I think everybody is deserving and in need of that." Metz also discussed the final season of her hit show, noting that expectations for the finale "will probably be exceeded."
Tire manufacturer Michelin is partnering with the popular video game "The Sims FreePlay" in order to meet teens where they are to promote driving safety. Michelin North America Chairman and President Alexis Garcin joined Cheddar News to discuss how the #GoldenGauge program integrates with the game. "If you're a gamer yourself or your kids, then while you're driving and moving on the application, you will find a Michelin billboard, and if you engage with that billboard, then you will get some advice about how tires are critical for your safety on the road," Garcin explained. *Updated with the full title of 'The Sims FreePlay' and a typo fix in the name of Alexis Garcin.*
The video game industry has come a long way from the first commercialized 3D video game in 1980, but it still has a long way to go. Video game creators have recently been called out for not having realistic Black hairstyles in their games and graphic artists are now taking matters into their own hands by creating The Open Source Afro Hair Library. Jovan Wilson, 3D artist and resident for The Open Source Afro Hair Library, joined All Hands to discuss.
